Customer Complaints Charges

Hi Everyone,

Can someone please advice me one below, just want to check how is this usually been tackled.

we have new customer who we started supplying our prouduct recerntly, on our first order we receved complaints saying that product are out of spec in weight wise, following to complaint they send us customer complaint charges note saying  ''complaint procedure standard charge £50''. I don't know if it is common to receive this sort of charges even without having previous agreement, can someone please advice how do I challenge this..? obviously our products are low commodity product and this sort of complaint charges wont be suitable to business.

thank you.

Nadim

This is an increasingly common approach in the UK, particularly favoured by the large retailers and their copackers, but also on the increase elsewhere too.

There will almost certainly be a clause in their Ts&Cs and/or contract that defines that this will happen, and as with all such things, the Ts&Cs will also say something to the effect that you have implicitly agreed to supply according to their terms, and that they prevail to the exclusion of all others.

It's also quite possible that your own Ts&Cs may prevail to the exclusion of all others, as it's a common approach in the UK. It then potentially becomes a question of who informed who of which Ts&Cs most recently (there will probably be a statement on purchase orders, invoices etc that says "all business according to our Ts&Cs"), and whether the clause itself is reasonable, but actually resolving this becomes a daft process in which the only winners are the lawyers.

I'd check exactly which Ts&Cs have been agreed by formally signing/countersigning, if any, and see what these say on the matter.

I'd also check any specifications that you may have completed for the customer, as these seem to have an increasing number of variously ridiculous/pushy terms like this in. Don't be shy about challenging these - I now send back many specs with 50-75% of these crossed through and replaced with a statement that we don't agree to them.

Finally, and most importantly, assuming that you're in QA/technical, you should pass this to the salesperson/account manager who is responsible for the customer, as it is really a commercial rather than technical issue, and is effectively taking money out of their profit margin. This therefore gives them a good incentive to either resolve it, or to ensure that whatever prices they agree in future will include an extra bit to cover such eventualities.

I agree often customers charge an "admin fee" for customer complaints.

Best policy is to reduce / prevent customer complaints.

Simon

Hi Nadim,

Are you looking to challenge the complaint itself or just the standard change? And have you investigated and concluded justified/unjustified? An 'admin fee' is quite common as far as I've seen; several of my customers will include one as standard with a complaint, on top of other charges if applicable depending on the nature of the complaint i.e. credit for unusable product. I also include a £50 admin fee when submitting a complaint to suppliers if their product is out-of-spec. However if they deem the complaint unjustified and we agree with their conclusion then we would not expect them to pay the fee. As pHruit mentions, the obligation for the fee may be a T&C clause and a potentially difficult/expensive road to go down.

If the weights were out-of-spec then I wouldn't worry about the complaint charge, but the complaint itself and focus on sufficient corrective actions to prevent further complaints and therefore complaint fees. If the customer ends up continuously complaining on each delivery and you believe the allegations to be false then it could be a matter for commercial, or potentially worth a visit to the customer to assess the situation and come to some arrangement if feasible.

Customer complaint admin fees are standard practice in the US and elsewhere.  When I was inspecting food conpanies for a national chain of grocery stores in the US I would see these letters from the chain and always wondered - what a great way to fleece the food manufacturers at $25-$50 a pop, that in itself can be a cash cow.  

I would imagine this was discussed at the time that the account was created with your sales rep, but not passed onto you - this is also something that happens a lot - lots of stuff is discussed in the sales world and never seems to be communicated the others in the company.

We have seen numerous "standard" charges arise over the last few years from customers, from complaints to warehouse fees. The crazy part is, they always seem to creep in but they're never in the original supplier agreements. We have one customer that sent us 2 - $500 invoices for detention fees at their distribution warehouse. We do not ship direct. Their product is sent by rail then common carrier who is then responsible for the scheduling and making the deliveries. The best part is, they try to make it a condition of doing business with them and send a separate, outside the originally agreed upon, supplier agreement. We refuse to sign, they still do business, life goes on, the money goes 'round, etc, etc... I'm sure most of it is for show or just to see who they can get to pay.

Honestly, this is Service Level agreement, between the customer and your company. Maybe you can ask you sales team/marketing if they entered in such agreement with the customer for charges. I have a problem with this if the management did not involve QA when they made the decision to enter in such a agreement. However, most of the time QA does not have a say on this as agreement to these charges is part of acquiring the customer.

On a QA perspective, I will be more concerned if this is a valid complaint and if this is a recurring complaint which can say a lot about my process.

Wait to you see what the grocery stores in Canada charge for you to sell your product to them!!!!!!!!!!!!!  $1000 fee if your truck is 2 minutes late to the dock (even when that is their fault)  And folks wonder why food is soooooooooooooo expensive!!!!

Wait to you see what the grocery stores in Canada charge for you to sell your product to them!!!!!!!!!!!!!  $1000 fee if your truck is 2 minutes late to the dock (even when that is their fault)  And folks wonder why food is soooooooooooooo expensive!!!!

I think I know which company you are talking about.
We had a situation where they were they scheduled for a delivery on a specific day, but when the delivery truck arrived, they were closed because it was a holiday.

They then sent us late delivery fees.

We got the fee waived and we changed our delivery schedule so that it wouldn't ever happen again.

Boy am I glad to work in the Quality department!

OMY, we all know who this retailer here in Canada! Horrendous fees and charges for everything!